Stikemans spearheads; Davies and BLG advise on HBC’s $2.9B luring of luxury retailer Saks

A bronze plaque identifies the Hudson's Bay Company flagship store in Toronto in this file photo

REUTERS/J.P. Moczulski/Files

Exactly two weeks after Canada’s retail make-up was changed when its biggest grocer, Loblaws, bought its biggest pharmaceutical chain, Shoppers Drug Mart, North America’s oldest commercial corporation today announced that it entered into a merger agreement to bring New York-based luxury retailer Saks Fifth Avenue north of the border, with Stikemans, Davies and BLG advising on the monster deal worth $2.9 billion.

The deal will see Hudson’s Bay Company acquire Saks for US$16 per share, totaling $2.9 billion, including debt. In addition, HBC entered into debt commitments with Bank of America Merrill Lynch and Royal Bank of Canada and equity investment agreements with Ontario Teachers’ Pension Plan (worth US$500 million) and West Face Capital (worth $250 million).

The transaction has been approved by each company’s board of directors and is expected to close by the end of the calender year, subject to approval by “Saks shareholders, regulatory approvals and other customary closing conditions.”

Stikeman Elliott LLP is acting for HBC with a team that includes: Ian Putnam, John Ciardullo, Jonah Mann, Kaleb Honsberger, Craig Broadhurst, Laura Levine, Kristina Vranjkovic (corporate, M&A); Dean Kraus (tax); Doug Klaassen and Annie Pyke (real estate); Jennifer Legge and Courtney Wilson (banking); Jeffrey Brown (antitrust), and Eliot Kolers (litigation). Willkie Farr & Gallagher LLP also is advising HBC with a team led by Gordon Caplan (private equity/M&A) and Greg Astrachan (M&A), and including: Henry Cohn (tax), Michael Katz (executive compensation and employee benefits), Steven Klein (real estate), Jeff Korn (litigation), Michael Zinder (finance), and Howard Block, Ruchi Patel and Dan Philion (corporate and financial services).

Davies Ward Phillips & Vineberg LLP is acting for Ontario Teachers’ Pension Plan Board in connection with the US$500-million equity investments with a team that includes: Vince Mercier, Peter Hong and Jay Galbraith (corporate); Ian Crosbie and Raj Juneja (tax), and Adam Fanaki (competition).

West Face Capital is represented in the transaction by General Counsel Alexander Singh, with support from Borden Ladner Gervais LLP. Alfred Page (securities) leads the BLG team, which includes Richard Bennett (tax); and David Surat, Habeeb Syed and William Jones (securities).

Wachtell, Lipton, Rosen & Katz is advising Saks in the US with a team led by Patricia Vlahakis, Joshua Cammaker and Gordon Moodie (corporate), and including: Jenna Levine and Mark Stagliano (corporate); Damian Didden and Franco Castelli (antitrust); Adam Shapiro and Rohit Nafday (executive compensation and benefits); Joshua Feltman, Gregory Pessin and Emily Johnson (restructuring and finance); and Jodi Schwartz and Michael Sabbah (tax).

The deal will help HBC target a range of consumers in the luxury, mid-tier and discount outlet retail sectors, according to The Globe and Mail. The merged company will have 320 stores – up to seven full-line Saks stores in Canada and two dozen under discount banner – and three e-commerce sites available over both borders.

Saks will remain headquartered in New York.

Ahmad Hathout

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